We will analyse a forex trading strategy who based on the use of EMA. The
main purpose of this strategy is to determine the price movement, also the time
for opening and closing the trading orders.
The forex trading strategy is easily applied, is understandable and deliver
excellent results.
We can use this forex trading strategy with any currency pair.
Timeframe
1 hour and higher timeframes are preferable.
The forex trading strategy contains the following indicators:
- EMA(5) – Exponential Moving Average
- EMA(13) - Exponential Moving Average
Buy Rules
EMA(5) cross EMA(13) from below.
We have to wait until close the candlestick.
We open a trading order at the
price of opening the following candlestick.
Stop Loss
We will place our stop loss at 50 pips from EMA(13).
In this way we have the
possibility to avoid non-predictable market movements.
Take Profit
When EMA(5) cross EMA(13) from above.
Sell Rules
EMA(5) cross EMA(13) from above.
We have to wait until close the candlestick.
We open a trading order at the
price of opening the following candlestick.
Stop Loss
We will place our stop loss at 50 pips from EMA(13).
In this way we have the
possibility to avoid non-predictable market movements.
Take Profit
When EMA(5) cross EMA(13) from below.
Important trading rules
Do not open trading orders if there is a gap of more than 100 pips between
the opening price and the level of stop loss order.
This rule will protect you from big market movements which is possible to
take place.
Many times after a big movement follow a retracement.
Do not open a trading order when there is only 1 pip between EMA(5) and
EMA(13).
Wait until the candlestick is closed with more safficient difference
between EMA(5) and EMA(13).
Important : All investors should know that any forex trading strategy before implementing in a real account needs to be
tested in a demo account in order to be fully understood.
Also, all traders
should be aware that extraordinary events occurring in the forex market very often, and is likely to alter the financial results of
a forex
trading strategy.
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